If you’re in the market for a fixed rate certificate of deposit but don’t want to keep your funds locked up for a long period of time, then a 6 month CD may be a good option for you to kick off 2021.
Normally 6 month CDs would offer much lower APYs (annual percentage yields) when compared to CDs with longer terms such as 3 or 5 years, however, in our current interest rate environment the difference between long and short term rates is far less significant.
We review several hundred banks and credit unions on a monthly basis and have visual pings set up to notify our system whenever rates change. We’ve used this data to compile our top 11 list of the best 6 month CD rates for January 2021.
Top Eleven 6 Month CD Rates
Some institutions featured below have regional exclusivity and others offer their products to customers nationwide. All are federally insured by either the FDIC (for banks) or the NCUA (for credit unions) up to the applicable limits.
|Name of Institution||Minimum Deposit||APY||Availability|
|ParkeBank||$500||0.75%||NJ and PA|
|Community Wide Federal Credit Union||$1,000||0.75%||nationwide|
|Spectrum Federal Credit Union||$500||0.60%||nationwide|
|Navy Federal Credit Union||$50||0.50%||must have family in armed services.|
|First Internet Bank||$1,000||0.45%||nationwide|
|Georgia’s Own Credit Union||$500||0.40%||Georgia residents|
|Bethpage Federal Credit Union||$50||0.40%||nationwide|
|Patelco Credit Union||$250||0.35%||nationwide|
|PenFed Credit Union||$1,000||0.30%||nationwide|
To give the annual percentage yields above some context, the current national average on 12 month CD sits at 0.22% APY and the current national average on a money market account sits at just 0.11% APY.
#1 ParkeBank – 0.75% APY
ParkeBank is a full service bank with a regional presence. They are based out of Washington Township, New Jersey and only have 7 branch locations throughout New Jersey and Pennsylvania.
Although they are a small brick and mortar bank, they do offer online banking to clients. You will need to be a resident and stop by a local branch to open a your initial account, but once it’s open you can move funds into other accounts like CDs through their online portal.
You can see their full list of CD rates here.
#2 Community Wide Federal Credit Union – 0.75% APY
Community Wide Federal Credit Union is a small member-owned institution based out of South Bend, Indiana. They were founded in 1967 and relied on seed money from the Catholic Church to survive their early days. Today, like many local credit unions, even if you don’t live, work or worship in South Bend, Indiana you can still become a member by joining one of their partner organizations. These memberships typically come with annual fees though, so be mindful of that when calculating potential earnings on your CD. You will also be required to make a minimum deposit into a Share Savings Account. This also acts as your ‘share’ in the member-owned credit union. You can see Community Wide Federal Credit Union’s full list of partner organizations here.
#3 Spectrum Credit Union – 0.60% APY
Spectrum Credit Union merged with Chevron Credit Union back in 2012, but still operates under its own brand. They have 100,000 members mostly in the Bay Area, but like Community Wide FCU, they open their arms to anyone who joins one of their partner organizations (found here).
#4 Navy Federal Credit Union – 0.50% APY
Navy Federal Credit Union needs little introduction being the largest credit union in the country by both members and assets with 9.4 million members and $130 billion in assets.
Despite NFCU’s vast size, they do not provide membership to anyone. They used to provide backdoor membership by joining one of several partner organizations, but this changed sometime in 2017 according to this online report.
That said, service members in all branches of the armed forces, along with their family and household members are eligible. You may apply online here or you can give them a call at 1-888-842-6328 or visit a local branch. Locate a branch near you.
#5 TAB Bank – 0.50% APY
TAB Bank stands for Transportation Alliance Bank and is known as the bank tailored for truckers. They got their start in 1988 in Odgen, Utah and entrenched themselves with truckers by starting out as a banking service that operated within the truck stops.
Today, they offer their high yield, FDIC-insured online deposit products to people nationwide. Outside of their 6 month CD on our list, they also have a variable rate, online savings account with an APY that’s often found at the front of the pack for online savings accounts.
#6 First Internet Bank – 0.45% APY
First Internet Bank has been selling online CDs since dial-up modems and AOL accounts.
As their name implies, they quite literally were the first, one-hundred percent online bank complete with FDIC insurance. They were founded in 1997 by David Pecker and opened their digital doors to customers on February 22, 1999.
Today, their CDs remain competitive for each term they offer up to 60 months. Their CDs can be opened both online or over the phone at 1-888-873-3424.
#7 Georgia’s Own Credit Union – 0.40% APY
Georgia’s Own Credit Union is a member-owned, not-for-profit, full-service financial institution.
Getting their start back in 1934 with just $160 they’ve since grown to be the 3rd largest credit union in the state of Georgia by both members and total assets. Today they serve more than 200,000 members and control just shy of $3 billion in assets.
Unfortunately, for many, this credit union is restricted to residents of Georgia. To see their complete eligibility checklist, visit their membership page.
#8 Bethpage Federal Credit Union – 0.40% APY
Bethpage is a small credit union based out of Bethpage, New York on Long Island (locate branches here) that has been serving members since 1941.
Despite their seemingly regional presence they actually open their membership to anyone willing to deposit $5 into a share savings account. This also serves as your ownership ‘share’ in the credit union. You can open a share account and learn more here.
Bethpage FCU also has a noteworthy youth savings account which provides a lucrative APY of 2.0% on the first $1,000, followed by a still respectable 0.35% on balances above $1,000.
#9 Patelco Credit Union – 0.35% APY
Unlike the other institutions on our list, Patelco offers its CD terms in ranges. For short term CDs, they have ranges of:
- 3 – 5 months
- 6 – 11 months
Their 3 – 5 month CDs come with an APY of just 0.20% while the 6 – 11 month term features the APY of 0.35%.
Although Patelco’s branches are limited to the Bay Area of California, they serve members in all 50 states. Like Bethpage, to join Patelco you must simply open a share account (minimum of just $1.00) which also functions as your stake in the institution. You can learn more and join using this link.
#10 PenFed Credit Union – 0.30% APY
Unlike Navy Federal Credit Union, PenFed opens its doors to anyone in the country willing to deposit $5 into a share account. You used to have to donate to a charity of their choosing for membership if you weren’t eligible through the standard paths, but that is not the case anymore.
You can complete a membership application online here or give them a call at 800-247-5626 and complete it over the phone.
On top of their solid 6 month CD, PenFed also has a variable rate online savings account that earns an exceptional APY of 0.55%. You can read more about this offering here.
#11 Sallie Mae – 0.30% APY
Sallie Mae originally came on the scene in 1973 to service federal education loans. They became private and offered private student loans while still operating under contract to service federal loans.
An overview of their history and controversies can be found here, but needless to say, their product line has evolved quite drastically since inception.
Along with their competitive 6 month CD, Sallie Mae also has an extremely competitive, variable rate savings product called SmartyPig. This account pays up to 0.80% APY on balances of $10,000 or less.
Who Should Open a 6 Month CD
In general, CDs (certificates of deposit) are good products for people looking for a fixed-rate of return for a specified period of time – 6 months.
They are considered short-term deposit products, along with 3 month and 9 month CDs, and are ideal for those who can keep funds untouched for the entire duration. If you are unsure whether or not you can keep your funds tied up for that long, you may want to consider a 3 month CD or a variable-rate savings account or money market account. Savings and money market accounts do not feature fixed rates though and are subject to change at any time without notice to the account holder.
CDs are also good options for people who are saving for something particular and do not want to have access to the funds they’ve set aside.
A 6 month CD, specifically, can be a good savings vehicle for those looking to save up for a vacation, a wedding ring, a downpayment to a car, etc. If you’re looking to save for something larger like a downpayment to a house you may want to consider a longer term CD with a higher rate.
CDs come with early withdrawal fees that can greatly reduce your earnings and even your principal in some cases. This can work as a great hindrance for those tempted to reach into their deposit prior to maturity.
6 Month CD – Bank or Credit Union
Deciding on whether to open a 6 month CD at a bank or credit union is going to rely on several factors other than simply who has the highest rate.
Credit Unions are not-for-profit, member-owned institutions that generally pass along profits back to its members in the form of lower loan rates and better savings rates. That is why you’ll generally see better APYs with credit unions than you would with brick and mortar banks – and especially the big banks (Bank of America, Citibank, Chase, etc).
However, given that credit unions are smaller, member-owned institutions and are not purely profit driven with aggressive growth goals, they tend to be more exclusive with membership than your average big bank. Some provide loopholes through membership in partner organizations, but you’ll need to check with each credit union individually for specific eligibility requirements.
Online banks may be a good option if your desired credit union is out of reach. They can compete on APY as well as they have little overhead compared to their brick and mortar counterparts. The operational savings found in their online business model can be used to entice new customers in the form of lower loan rates and better savings rates.
Alternatives to 6 month CDs
If you’re turned off by the current interest rate environment for short term CDs, you have some alternatives to consider.
For those relying on the safety of FDIC coverage, you might want to explore cash management accounts.
These accounts are hybrid accounts that usually provide a combination of checking, savings, and investment services. They are tech companies at their core, but rely on the FDIC insurance of their partner bank(s). At the end of each day funds are swept into partner banks to leverage their FDIC-insurance. You can generally exceed the $250,000 FDIC limit as well by having funds swept into multiple institutions at day’s end.
A good cash management account comes with no fees and features high APYs. Currently the most popular options hover between 0.30% and 0.40% APY. The Aspiration Spend & Save account still features an APY of 1.00%.
Another option that provides FDIC insurance are rewards checking accounts. These accounts usually provide cash back on spending or very generous yields on savings. Many accounts pay well over 1.00% APY on balances, but there is generally a catch.
Most of the accounts require a certain number of debit card transactions from the account each month (typically 10) as well as a direct deposit set up. On top of that, in most cases you can only earn the exceptional APY up to a certain balance amount. Capping balances from $5,000 to $10,000 is typical but some go higher.
Failing to meet either the required number of debit card transactions OR the monthly direct deposit will result in either no interest paid, or worse, a hefty fee. Check with the institution directly to see what the exact monthly requirements are.
If you’re open to taking on more risk, we’ve also compiled a list of alternatives to CDs and savings here that feature a dozen different options.